Lease extensions, specifically for residential property held on long leaseholds are becoming more popular for many people. There are many reasons why a tenant, property owner or investor would want to extend a residential lease. Some of the biggest reasons driving the popularity for extending leaseholds include increasing property values, improved security of tenure and increasing its attractiveness to future buyers.
Investment Property Partners property investors guide to lease extensions covers a number of important issues that you may wish to consider if you are considering extending a the lease on a residential property.
What are Lease Extensions?
For those of you who are a little unsure about what a lease extension involves, and why anyone would want to go down this particular road you should first understand that a residential lease can be granted to a new owner if the property has a leasehold contract that allows them to stay in that property for an agreed period of time… typically these leasehold periods start from 99 years.
How to Extend a Lease
Residential leasehold properties tend to have good re-sale prospects if the lease has at least 95 years left to run.
Because of the attraction and security that comes with extending leaseholds, it is pretty obvious why many people see lease extensions as an attractive option worthy of further consideration… but how do you go about extending a lease?
First of all, you should find out whether your lease is actually eligible for extension.
Once you have confirmed that your lease can be extended, you should then look to select and appoint your professional team of advisors.
Your team will usually comprise various property and legal experts who will help steer you through the lease extension process helping you to avoid any pitfalls and ensuring everything is completed correctly.
Using Solicitors & Licensed Conveyancers
Lease extensions can be complicated affairs and to ensure everything goes to plan you’ll need the assistance of a legal professional such as a solicitor or licensed conveyancer.
An experienced solicitor or licensed conveyancer expert in the leasehold extension process will be an ideal choice to help you deal with the legal complications of such a move.
You should always ensure that you select your legal advisors with care as they are crucial to a successful outcome.
Look for lawyers with a good local reputation and expertise in dealing with lease extensions.
You should also ensure that they are suitably qualified to advise on such matters.
Specialist Property Valuers & Chartered Surveyors
We would also recommend that you appoint a specialist property valuer or chartered surveyor who should be a member of the Royal Insitution of Chartered Surveyors (RICS), and a lease extension specialist.
How much will it Cost to Extend a Leasehold?
One of the biggest issues to consider when thinking of extending a lease is how much it will all cost.
At the outset it is usually difficult to generate an accurate figure however, if you understand what is involved and know the kinds of things to budget for, at least you’re on your way to establishing an outline estimate.
How to Calculate the Value of Lease Extensions
Property valuations associated with a lease extension typically include three separate elements and they include:
These three elements made up of marriage value and compensation are calculated and then used to determine the value of the leasehold extension.
How Long Will it Take to Extend a Lease?
Generally, lease extensions typically take around a year to complete fully.
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More information about lease extensions and what’s involved from the the Leasehold Advisory Service… here →
More information about leasehold valuations… here →